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American Capital Agency Corp. (AGNC)

  • Tue, May 12, 4:43 PM
    • Estimated book value per share of $25.12 as of April 30 is off from $25.53 one month earlier. The company, however, declared both the April and May dividend in April (a total of $0.42). Today's close of $20.60 is an 18% discount to book.
    • Source: Press Release
    • AGNC -0.5% after hours
  • Thu, May 7, 3:01 PM
    • "Share buybacks come directly out of our capital and I equate it to Apple closing down the very factories that produce the cash flow they used to buy back their stock," says Annaly (NLY +0.8%) CEO Wellington Denahan on the earnings call (transcript).
    • Denahan notes Annaly since inception has returned 510% vs. the S&P 500's 200% - this while S&P companies bought back $5T in stock and Annaly repurchased zilch (A contrary take: Not every company has the opportunity to buy back stock at a 22.5% discount to book value).
    • UBS's Matthew Howlett has Sell recommendations on both Annaly and American Capital Agency (AGNC +0.1%) in part because of their reluctance to repurchase shares (AGNC has been an enthusiastic repurchaser in the past). He notes a possible misalignment of management and shareholder interests as the firms' managers get higher fees from higher assets.
    • Previously: Annaly Capital edges higher after earnings miss (May 7)
    • Previously: Annaly income stung by slimming margins, higher prepays (May 6)
  • Tue, May 5, 10:31 AM
    • A big move higher in interest rates continues, with the 10-year Treasury yield up another six basis points to 2.20% - roughly the level at which it started the year (it fell as low as 1.65% in early February).
    • The move here is small-time compared to what's going on across the pond, as the absurd levels of two weeks ago become somewhat less absurd. Ten-year Bund yields are up to 0.51% from 0.05%. Italian 10-years are up 30 bps today to 1.78%, with a similar move in Spain.
    • The IYR is down 1.1%.
    • Individual names: Realty Income (O -1.3%), Senior Housing Properties (SNH -1.5%), Medical Properties Trust (MPW -2.4%), Gramercy Property Trust (GPT -1.8%), Equity Residential (EQR -1.4%), AvalonBay (AVB -1.5%), Government Properties (GOV -2.3%), Pebblebrook Hotel (PEB -2%), Eastgroup Properties (EGP -1.6%), American Campus (ACC -1.4%).
    • Mortgage REITS (REM -0.6%) are outperforming the equity names: Annaly (NLY -0.7%), American Capital Agency (AGNC -0.6%), Two Harbors (TWO -0.7%), CYS Investments (CYS -0.3%), Invesco (IVR -0.2%).
  • Thu, Apr. 30, 3:15 PM
    • A big rise in interest rates early in the session made for a good excuse to sell REITs, but - with the averages sharply lower - rates have reversed course. Still, the sector can't catch a bid, with many of the bigger names down way more than the broader market.
    • Equity REITs: Realty Income (O -2.3%), Health Care REIT (HCN -3.2%), Ventas (VTR -3.2%), HCP (HCP -3.1%), Equity Residential (EQR -2.6%), Silver Bay Realty (SBY -2.5%), General Growth Properties (GGP -2.4%), Retail Opportunity (ROIC -3.9%), Boston Properties (BXP -2.4%), Hospitality Properties (HPT -2.9%)
    • Mortgage REITs: Armour Residential (ARR -5.6%) - which reported another weak quarter overnight, Two Harbors (TWO -1.1%), Western Asset (WMC -1.3%), Arlington Asset (AI -2.8%), PennyMac (PMT -1.5%). When things get tough, money does have a tendency to flow into the sector giants though: Annaly Capital (NLY -0.4%) and American Capital Agency (AGNC +0.3%) are notable outperformers on the session.
  • Wed, Apr. 29, 8:08 AM
  • Tue, Apr. 28, 11:27 AM
    • In his 25 years in the business, American Capital Agency (AGNC -2.4%) CIO Gary Kain - opening up the earnings call - can't remember a quarter with such "two-way" volatility as was seen in Q1.
    • Presentation slides
    • Expecting the volatility to continue, management has turned conservative - reducing interest rate exposure and cutting leverage. This conservatism has a cost, says Kain, thus the monthly dividend cut to $0.20 per share from $0.22.
    • The good news: Despite the volatility, AGNC book value has remained fairly stable over the last six months, and the company has earned a positive economic return - defined as the change in book value plus the dividend - of 5.13% (10.26% annualized).
    • Opening up the Q&A, Wells Fargo's Joel Houck questions the conservative stance, noting this sort of volatility in the past has been when Kain and team have earned their stripes by delivering alpha. Kain: It's a good question, but we're hunkering down for now and will pick our spots.
    • Previously: American Capital Agency declares $0.20 dividend (April 27)
    • Previously: American Capital Agency income and book value slip in Q1 (April 27)
    • Previously: American Capital Agency misses by $0.04 (April 27)
  • Mon, Apr. 27, 4:19 PM
    • American Capital Agency (NASDAQ:AGNC) declares $0.20/share monthly dividend, -9.1% decrease from prior dividend of $0.22.
    • Forward yield 11.17%
    • Payable June 5; for shareholders of record May 29; ex-div May 27.
  • Mon, Apr. 27, 4:14 PM
    • Q1 net spread and dollar roll income of $0.70 per share down from $0.92 in Q3. Quarterly dividend run rate of $0.66.
    • Book value per share of $25.53 slips from $25.79 estimated one month ago and $25.74 at the start of the year. Today's close of $21.47 is a 15.9% discount to March 31 book.
    • Economic return for the quarter - defined as the dividend plus/minus the change in book value of 1.7%, or 7.1% annualized.
    • 8.4% CPR for the quarter vs. 9% in Q4. Net interest spread of 1.64% slips 21 basis points.
    • "At-risk" leverage of 6.4x down from 6.9x in Q4. The CFO notes the company is operating at its lowest leverage level in more than six years - a conscious decision made by management in light of what it expects to be significant volatility.
    • Earnings call tomorrow at 11 ET
    • Previously: American Capital Agency misses by $0.04 (April 27)
    • AGNC flat after hours
  • Mon, Apr. 27, 4:06 PM
    | Comment!
  • Sun, Apr. 26, 5:35 PM
  • Mon, Apr. 13, 4:55 PM
    • REITs typically face headwinds as monetary policy tightens thanks to the liability sensitivity of their balance sheets, says Wunderlich. Certain strategies can mitigate this, however, and some mREITs are doing a better job than others, meaning they could be buys even if rates move higher this year.
    • First is American Capital Agency (NASDAQ:AGNC), yielding 12.3% and trading at a sizable discount to what was stable book value as of the end of February.
    • Next is AG Mortgage Investment (NYSE:MITT) which has diversified its portfolio to include 45% credit-sensitive assets, i.e. not necessarily impacted by rates. MITT yields 12.7% and trades at a 6% discount to trailing book value.
    • Source: Barron's
  • Mon, Apr. 13, 4:04 PM
    • American Capital Agency (NASDAQ:AGNC) declares $0.22/share monthly dividend, in line with previous.
    • Forward yield 12.23%
    • Payable May 8; for shareholders of record April 30; ex-div April 28.
  • Wed, Mar. 18, 2:30 PM
    • Worries about a sharply flatter yield curve abate just a bit as the FOMC drops "patient" from its policy statement - putting rate hikes on the table at subsequent meetings - but Fed economic projections send a dovish signal, with outlooks for economic growth, inflation, and the pace of rate hikes all cut from previous estimates.
    • Outperforming the averages: Annaly Capital (NLY +1.1%), American Capital Agency (AGNC +1.5%), Two Harbors (TWO +1.5%), CYS Investments (CYS +2%), Invesco (IVR +1.7%), Hatteras (HTS +1.7%), Capstead (CMO +2.1%), MFA Financial (MFA +1.7%), Anworth (ANH +2.2%), Dynex (DX +1.5%), Five Oaks (OAKS +3.3%).
    • Previously: FOMC drops "patient," but sends dovish signal (March 18)
  • Thu, Mar. 12, 4:45 PM
    • American Capital Agency (NASDAQ:AGNC) declares $0.22/share monthly dividend, in line with previous.
    • Forward yield 12.56%
    • Payable April 10; for shareholders of record March 31; ex-div March 27.
  • Thu, Mar. 12, 4:23 PM
    • Estimated book value as of Feb. 28 is $25.79 per share, and includes the deduction of the $0.22 monthly dividend. Book value at January's end was $25.58. A $0.22 dividend has been declared for March as well.
    • Today's close of $21.02 puts the stock at an 18.5% discount to book.
    • Source: Press Release
    • AGNC +0.1% after hours
  • Tue, Mar. 10, 3:08 PM
    • With the averages having a tightening tantrum - the Dow down nearly 300 - money is cautiously flowing into some income plays, notably the REITs. The iShares U.S. Real Estate ETF (NYSEARCA:IYR) is flat on the session.
    • Among the larger caps: Simon Property (SPG +0.2%), General Growth (GGP +0.7%), Health Care REIT (HCN +0.9%), HCP (HCP +0.4%), Equity Residential (EQR +0.5%), AvalonBay (AVB +0.6%), Boston Properties (BXP +0.2%), American Capital Agency (AGNC +0.2%), Annaly Capital (NLY -0.8%)
    • Previously: Yields tumble alongside stocks (March 10)
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Company Description
American Capital Agency Corp is a real estate investment trust that invests exclusively in residential mortgage pass-through securities and collateralized mortgage obligations on a leveraged basis.
Sector: Financial
Country: United States